As far as the International Monetary Fund (IMF) is concerned, issues of corruption and climate disruptions are enough to convince them to project economic growth of the Philippines at a slower pace not just for this year but also for next year, according to a Manila Bulletin news report.
To put things in perspective, posted below is an excerpt from the business news report of the Manila Bulletin. Some parts in boldface…
Washington-based multilateral lender International Monetary Fund (IMF) has tweaked downwards its economic growth projections for the Philippines this year and the next, following its more somber outlook for 2025 amid corruption allegations and climate disruptions.
According to the IMF’s updated World Economic Outlook (WEO), Philippine gross domestic product (GDP) is now seen expanding at a slower 5.1 percent, down from its earlier forecast of 5.4 percent—both of which fall short of the country’s already lowered target of at least 5.5 percent.
Despite the cut, the IMF’s forecast remains slightly more optimistic than the Bangko Sentral ng Pilipinas’ (BSP) assumption of a 4.6 percent growth rate, which the central bank has attributed to a loss of confidence tied to governance concerns.
For 2026 and 2027, the IMF also trimmed its growth forecasts to 5.6 percent from a previous 5.8 percent, and to 5.8 percent from 6.1 percent, respectively. The central bank’s projection of 5.4 percent for 2026 stands lower than the IMF’s forecast, while its 6.2 percent forecast for 2027 is higher.
These projections still fall within the revised targets, based on National Socioeconomic Planner Arsenio M. Baliscan’s lower growth assumptions. Baliscan expects growth to clock in at five to six percent in 2026, and 5.5 to 6.5 percent in 2027—both lowered from the earlier goals of six to seven percent.
According to the IMF, the downward adjustment for 2026 and 2027 “reflects the carryover impact from a downward revision in the IMF’s growth forecast for 2025—from 5.4 to 5.1 percent—and a slower pace of capital accumulation.”
It noted that the slashed GDP growth forecast for 2025 reflects the output slump in the third quarter of 2025 “amid recent corruption allegations and climate shocks impacting economic activity in the second half of the year.”
To recall, the Philippine economy expanded by four percent in the third quarter of 2025—the weakest in four and a half years.
Looking ahead, output expansion could accelerate slower than expected mainly due to the potential “escalation of trade restrictions and prolonged uncertainty, geopolitical tensions, and disruptive financial market corrections.”
“On the upside, accelerated implementation of structural and governance reforms can boost investment and foreign direct investments (FDI), increase fiscal multipliers and boost potential growth,” the lender said.
What would drive the economy in the medium term is robust private consumption and higher investment, the IMF said, “supported by monetary policy easing and the authorities’ recent policy initiatives to support private investment.”
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines can somehow grow faster than what the IMF projected for 2026 and 2027? Do you think foreign investors have been turned off by the flood control corruption scandals?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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